The following blog is the first in a series of three that explores the consumer-brand data-driven value exchange and why it’s more important today than ever before.
In today’s marketplace, the consumer-brand data-driven value exchange is more important than ever before. Brands are striving to create deeper and more meaningful relationships with their customers, and consumers are increasingly open to sharing data in exchange for incentives. As a result, there are endless possibilities for brands to move beyond purely transactional relationships to ones that provide value and enrich their customers’ experiences.
Defining the consumer-brand data-driven value exchange
At its most basic level, the consumer-brand value exchange occurs when a consumer provides data in exchange for something in return. Sounds simple, right? Historically, the value exchange has been primarily transactional in nature. However, now brands are able to provide more than goods and services, and there is the expectation that they will. A brand may reward consumers with content, information, incentives or anything considered valuable by a consumer. And in the increasingly connected world, the reward consumers value most is a superior brand experience.
The current state of the consumer-brand value exchange
In general, consumers are quite willing to share their data -- especially when they believe it benefits them. Whether this entails wearing a monitoring device in exchange for health-enhancing advice, or allowing their driving habits to be followed in exchange for savings, consumers are engaged. And yet, there seems to be a growing discrepancy between how brands and consumers feel about the value exchange. Consumers detect an imbalance and feel that the brands are benefitting the most. According to Edelman’s 2014 global brandshare study, “While brands like to feel like they are delivering value to consumers beyond the transactional relationship, the people surveyed across the globe are indicating it’s not enough.“
Why the consumer-brand value exchange is imbalanced
The imbalance felt by consumers can be explained by several contributing factors:
- Data breaches: Every day in the media, there’s a new story about data breaches -- often involving the most trusted household brands. While this makes for good news, it leaves consumers fearing for the safety of their personal data.
- Transparency: In some cases, consumers are not fully aware of what data is being collected from them. This leaves consumers feeling like “Big Brother” is watching, and it underscores the importance of disclosing the data being collected by brands.
- High expectations: Brands that do a great job of transforming data into life-enriching experiences raise the bar for brands that don’t, since consumers start to expect the same exchange with all brands.
- Tangible benefits: Often, consumers never receive any benefit in exchange for sharing their data. Although they fill out a form or give consent, there is no follow-up from the brand, creating skepticism and mistrust.
Re-thinking the consumer-brand value exchange
In order to bring the value exchange back into balance, it is the responsibility of brands to translate the reams of data they possess into intelligence that deepens and strengthens their relationships with consumers, as well as differentiates them from competitors.
Part 2 of this series will explore the role data plays in this exchange and the evolving consumer relationship.